TECHNOLOGY has transformed the way we obtain information.

       We are updated by the second, literally by the devices in the palms of our hands. Not only is information borderless and globalised, it has also become democratised – any person with Whatsapp or Facebook now becomes a conduit of information as much as a news anchor.

       With information overload, it has become increasingly difficult to discern between what’s “right” and “wrong”. This becomes especially pertinent for topics that can be complex or heavy, like personal finance.

       It is therefore ever more crucial that we understand how the younger generation are thinking about their money.

       As part of our upcoming report “The Rise of Millennial and Gen Z Investors: Trends, Opportunities, and Challenges for Malaysia”, the Institute for Capital Market Research (ICMR) conducted a nationwide quantitative survey of 1,500 respondents between the ages of 21 and 40, and qualitative interviews for more nuance.

       The survey aimed to understand how millennial and Gen Z Malaysians seek financial information and make financial decisions. These considerations will highlight the direction that policy and the industry should take to remain relevant and impactful.The Internet as the predominant source of information

       From the survey responses, the most popular source of information was the Internet/online sources. From this group, Facebook/Instagram, websites/blogs and YouTube were the most common. The preference for online sources is even more prevalent among those below 30 years old.

       The Internet is abundant with resources for different levels of financial literacy. It is great for those who are actively seeking out information and has levelled the playing field in providing access to information.

       Investment decisions that were once only made by privileged investors with access to sophisticated analyst reports can now be made by anyone.

       However, our research has shown that people don’t know what they don’t know. Those with lower levels of financial literacy, who need these resources the most, may not even be the ones exposed to the necessary information as they are simply not looking for it.

       In recent years, social media platforms have emerged as an avenue for financial literacy exposure to those who need it the most. Platforms like TikTok provide an opportunity to reach out to the target segment of those who are not actively seeking out financial information.

       It is, however, a double-edged sword. Without the basics of financial literacy in place, some individuals can become more susceptible to misinformation on social media. The sheer volume of material online could also lead to information overload, creating more confusion if one is unable to discern what is the right information for themselves personally.

       For example, a look at the #fintok hashtag on TikTok (which has had more than 500 million views at the point of writing) reveals that it includes everything from basic budgeting tips to advice on specific stock picks.

       Meanwhile, regulating financial information remains a challenge. Recent efforts by TikTok to ban influencers from directly promoting specific financial services and products is a welcome step in the right direction, but most financial content and creators remain beyond the ambit of regulators themselves.Trust and relatability matters

       Social media platforms play a big part in normalising conversations about personal finance.

       When it comes to discussing personal finances with peers, many interview respondents felt that conversations among friends about money should be normalised, and that it should not be as taboo as the way previous generations had perceived it to be.

       This is in line with other global studies, which found that millennials are a lot more transparent with peers about their money compared to previous generations.

       Part of this could be due to the idea of relatability and trust – our research found that both elements are crucial to millennials and Gen Zs when it comes to making financial decisions.

       Global studies have shown that millennials and Gen Zs lack trust in most traditional institutions like traditional media and business, political, or religious leaders.

       This is why they might turn to people around them for advice, as they feel more comfortable talking to those with similar financial standing and goals as themselves.

       To make more discerning financial decisions, individuals need other reliable sources of information.

       Our survey found that the second most popular source of information after online sources was friends and family.

       Research has shown that the financial decisions of the people around you have an impact on your personal financial decisions, through direct social interactions such as word of mouth recommendation, or indirect social pressure.

       However, there remains a disparity: those with higher levels of financial literacy tend to supplement advice with additional research, while those with lower levels of financial literacy tend to immediately heed advice from family or friends they trust.

       This could lead to misinformation or scams, particularly if one places blind trust in the people around them.

       A new approach to financial literacy

       As the way we obtain information evolves, so should financial literacy efforts.

       Effective financial literacy efforts need to account shifts in information sources and engage with the new generation of investors, or risk being perceived as outdated and irrelevant.

       At the same time, increasing reliance on non-traditional and unregulated sources for information requires investors to take increasing ownership of their decisions.

       This could be a challenge if investors are not equipped with the right tools to discern what is right for them amidst information and choice overload.

       Opportunities to supplement financial literacy knowledge are plentiful.

       One such initiative that Malaysian youths should take advantage of is the Financial Literacy Month, taking place this October.

       It includes programmes that aim to educate and empower Malaysians with financial knowledge and skills.

       Malaysia’s Financial Literacy Month 2021 is an initiative driven by the Financial Education Network, co-chaired by Bank Negara and the Securities Commission.

       Datin Azleen Osman Rani is the director of the Institute for Capital Market Research or ICMR, an independent think tank dedicated to conducting research on capital market development. For more information on ICMR, please visit www.icmr.my. The views expressed here are the writer’s own.